India has revealed a ₹69,725 crore package to boost its shipbuilding and maritime ecosystem. This replaces the 2015 package set to end in March 2026. The new plan aims to expand India’s shipbuilding capacity, modernise shipyards, and support shipowners. The focus is on overcoming past challenges and competing globally.
Current Context of Indian Shipbuilding
Over the last decade, India built very few merchant ships. Defence orders kept some yards busy but large merchant shipbuilding remained minimal. India’s capacity is tiny compared to global leaders. The new package targets increasing capacity to 4.5 million gross tonnage. It seeks to modernise yards with advanced technology and better management. The plan also promotes new yards clustered with factories for shipbuilding parts.
Global Shipbuilding Practices
Countries like South Korea, Japan and China have perfected shipbuilding. They prefabricate large ship components outside dry docks. These components are then assembled quickly using heavy cranes. Their shipyards function like assembly lines. The time from steel cutting to sea trials is about a year. Indian yards lack length, crane capacity and space for such prefabrication. This limits efficiency and increases costs.
Challenges in Indian Shipyards
Indian yards face multiple bottlenecks. Slow turnaround of two to three years ties up capital. Ancillary industries supplying parts are underdeveloped. This discourages shipowners from commissioning new ships despite subsidies. Upgrading yards must address these issues to reduce delays and cost overruns. Training skilled manpower is also crucial, as seen in China’s approach.
Financial and Market Constraints
Classifying ship newbuilds as infrastructure has lowered financing costs for large vessels. However, this benefit does not extend to smaller ships, limiting growth. Shipowners lack confidence due to uncertain long-term demand and risks of delays. India’s green fuel projects have not yet translated into demand for green ships. Long-term contracts and assured offtake from state utilities and oil companies could provide the needed market stability.
Way Forward for Indian Shipbuilding
India must start with smaller ships above 500 gross tonnage. Upgrading infrastructure and creating ancillary clusters will improve efficiency. Developing skilled labour and adopting global best practices are essential. Financial incentives should be linked to assured long-term shipping contracts. This will encourage shipowners to invest in new builds domestically. The package aims to create a sustainable maritime ecosystem aligned with global standards.
Questions for UPSC:
- Discuss the challenges faced by India’s shipbuilding industry and the measures needed to enhance its global competitiveness.
- Critically examine the role of infrastructure financing in promoting industrial growth with reference to India’s shipbuilding sector.
- Explain the impact of technological advancements on global manufacturing industries. How can India leverage these in traditional sectors like shipbuilding?
- With suitable examples, discuss the importance of long-term demand visibility and government policy in developing strategic industries such as maritime shipping.
